Why Are Free Cities Good for Hondurans?

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If one does a Twitter search for #CMenHondurasNO one will find many tweets against free cities in Honduras and the fact that Anonymous groups in Latin America have done cyber attacks against Honduran government websites in protest. Why is this the case? One recent article in the Freeman, No Exit: Are Honduran Free Cities DOA?, stated some possible reasons. Paul Romer, who helped popularize the idea of charter cities (and can be seen in the video below), apparently “failed to appreciate the powerful emotions that nationalism can stir up, especially among people who, like the Hondurans, have suffered colonial rule.”

So, I have been pondering what I would tell a Honduran who is concerned about how a free city might encroach upon their national sovereignty.

First, I would explain that Romer’s proposal is only one of many; his happened to involve the host country allowing a first-world third party, such as Canada, “to help govern a portion of its territory.” Others’ proposals, such as Michael Strong’s, did not involve foreign governments and, as such, might be preferable.

Second, what’s being proposed isn’t a land-grab of any sort. It is setting up an uninhabited land area as a zone that will have it’s own policing and legal structure. Proposals have had stipulations requiring that 90% of the jobs in these zones must go to Hondurans; therefore, these cities would still be Honduran in that sense, which is the most important one.

Third, if these cities are allowed to be established, they will be the envy of the earth. Hondurans who choose to move to them will have opportunities found nowhere else in Latin America. There is an undeniable correlation between free markets and economic prosperity.

Fourth, consider the potential benefits to the worst potential outcome.  The possible gains include having one of the highest economic growth rates in the world and vastly reducing poverty in Honduras. The worst potential outcome is that foreigner’s investments in land development go bad and they leave.

I would urge people to look into the ideas behind the free cities: that legal systems are one of the main determinants of economic prosperity. There is so much to gain from it. The reason it’s being proposed in Honduras is not because people want to take it over; it’s because they can’t create a free city in their native lands. They want to have freedoms that they are kept from having elsewhere.

Michael Strong on free cities:

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